Angel Broking's report on Surya RoshniSurya Roshni’s top-line for 1QFY2016 improved by 8.8% yoy to `731cr, which is slightly higher than our estimate of `712cr. The Lighting business posted a robust growth of 22.4% on a yoy basis to `318cr while the Steel business reported flat revenues for the quarter, ie of `466cr, at the gross level. The EBITDA margin contracted by 65bp yoy to 7.6%. The interest expense for the quarter declined by 14.3% yoy to `25cr, while the depreciation expense rose 9.2% yoy to `15cr. Other income remained flat on a yoy basis. Consequently, the net profit increased by 5.3% yoy for the quarter to `12cr (vis-à-vis our expectation of `15cr).Outlook and Valuation: With higher contribution from the Lighting business and entry into newer businesses, we expect the company to post a CAGR of 6.2% in the top-line over FY2015E-17E to `3,223cr. The EBITDA margin is estimated to improve from 7.8% in FY2015 to 8.5% in FY2017. Consequently, the ne t profit is expected to post a CAGR of 21.6% over FY2015E-17 to `80cr. At the current market price, the stock is trading at 7.6x its FY2017E earnings. We maintain our Buy rating on the company and revise our target price to `183, based on a target PE of 10.0x for FY2017E, says Angel Broking research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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